Operational Aspects of Factoring India Factoring & Finance Solutions Pvt Ltd Operational Aspects of Factoring Global Factoring Summit – 5th May 2017 Ganesh Nalawade Chief Operating Officer

(Factoring Company in Buyer’s Country) Export Factoring Non-Recourse – Transaction Flow Our Client Exporter Client’s Buyer In Foreign Country 1. Ships Goods on Credit Terms 6. Follow up 7. Payment on Due Date 2. Submits Invoice + Shipping Docs 4. Pays 90% immediately 3. Sends Documents 9. Pays balance 10% 5. Informs Invoice details 8. Remits money received or Pays on PUG date Our Correspondent (Factoring Company in Buyer’s Country) India Factoring Follows up with Buyer and Collects dues Covers the Buyer’s Risk (Pay us in case of default) Credit Management (Keeps updated on Buyer’s credit standing) We Finance We Manage Client’s whole ledger

(Factoring Company in Buyer’s Country) Limit Setup Exporter Client’s Buyer In Foreign Country India Factoring Our Correspondent (Factoring Company in Buyer’s Country) Client’s Buyer In Foreign Country Debtor Limit Setup Buyer’s creditworthiness Based on your sales & agreed tenor Not Balance Sheet Sales Limits Client Limits Sum of Debtor limits * 90%

Correspondent Factor FCI Members (90 countries with 400 + members) Exporter Client’s Buyer In Foreign Country India Factoring Our Correspondent (Factoring Company in Buyer’s Country) Our Correspondent (Factoring Company in Buyer’s Country) FCI Members (90 countries with 400 + members) Local knowledge about buyer No separate Credit Insurance required Coverage of upto 100% of Invoice No Bills of Exchange required Consignee need not be Bank Collection (Language & Time Zone issues solved) Credit Protection Credit Management – Early Warning Signals

(Factoring Company in Buyer’s Country) Export Factor Exporter Client’s Buyer In Foreign Country India Factoring Our Correspondent (Factoring Company in Buyer’s Country) India Factoring Funding on Shipment (no BoE/acceptance required) Prepayment upto 90% Interest – Monthly on the funds drawn Credit Cover on Incoterms All regulatory obligations serviced GR/SB  Authorised Dealer EDPMS BRC FIRC CERSAI

(Factoring Company in Buyer’s Country) Exporter Exporter Client’s Buyer In Foreign Country India Factoring Our Correspondent (Factoring Company in Buyer’s Country) Client - Exporter Cash Flow issues solved Funding on Shipment (no BoE/acceptance required) Limits based on Turnover to Debtor, not on B/S strength Self liquidating facility Unsecured facility Off Balance Sheet Credit Cover on Incoterms Collection Services (language & time zone issues solved) No Penal Interest for overdues Credit Protection upto 100% Credit Management – Early Warning Signals Just focus on your business

Factoring vs Bank Finance Receivables are Assigned / Purchased Factoring Limit - Off Balance Sheet (Non-Recourse) Unsecured Receivables get converted into Cash Factoring Limit is based on future Sales Factoring is based on Client’s performance of goods and Debtor’s Creditworthiness Collection Services No Penalty on Overdues Buyer Concentration approach Bank Finance Receivables are Hypothecated Bank Limit reflects on Balance Sheet as Loan Mostly Secured Receivables remain as Debtors Bank Limit is based on Balance Sheet Banking Limit is based on Client’s Creditworthiness No Collection Services provided Penal Interest on Overdues Client Concentration approach

Thank You India Factoring & Finance Solutions Pvt Ltd Global Factoring Summit – 5th May 2017 Ganesh Nalawade Chief Operating Officer